Panel to urge more disclosure of independent spending

By B

Sep 27, 2012 | 1:52 PM

A panel set up by the General Assembly to study Maryland's campaign finance laws plans to recommend a series of measures that would force outside interests that advertise in Maryland political campaigns or ballot issues to disclose their spending more fully and quickly.

As it edged toward a final consensus on a report, the Commission to Study Campaign Finance Law reached consensus that the legislature should apply to all elections and referendum campaigns a standard it adopted requiring so-called "independent expenditure committees" to report spending of $10,000 or more within 48 hours of doing so.

That requirement has let the media track, through filings with the State Board of Elections, the spending of millions of dollars by such companies as MGM Resorts International and Penn National Gaming on the current gambling referendum. Theoretically, the commission's recommendations would apply to any case in which an outside group tried to support or oppose a ballot question of candidate for state or local office.

The expected proposal would not attempt to limit the spending itself because of Supreme Court cases classifying such expenditures as free speech.

The commission is also likely to recommend that the legislature go a step farther and require that the main financial backers of a particular ad -- whether on TV or radio or in print -- disclose in the ad itself that they are the ones paying for it. In the gambling referendum, the two sides have operated under the names of their ballot committees, Get the Facts -- Vote No On 7 and FOR Maryland Jobs and Schools Inc. If the commission's approach were in effect now, they would presumably have to tell voters that the ads were sponsored by Penn National on one side and MGM and Caesars Entertainment on the other.

The commission also agreed to recommend that the penalties for failure to file promptly be increased to provide a more effective deterrent against large out-of-state groups that might want to avoid the disclosure requirements. The panel plans to suggest tying penalties -- now limited in all but flagrant cases to a $250 fine -- to the seriousness of the violation. The commission noted that federal law allows a civil penalty equal to the amount of the violation -- double if the infraction is "knowing and willful."

The panel also seems likely to urge lawmakers to consider a threshold of about $5,000 in local and General Assembly races.

The commission had less success reaching consensus on the tricky issues of spending by slates of candidates. There was widespread agreement that the current system, under which a slate can spend unlimited amounts on one of its members without reporting which candidate benefited, needs reform. But the panel repeatedly ran up against the complexity of devising specific proposals. The commission decided to urge the legislature to consider requiring greater disclosure of spending on behalf of slate members, limiting the amounts of money that can be transferred within the slate and redefining the types of candidates that can be included within the slate. The last of the three, known as ballot commonality, seemed to have the least support.

The panel, which had been expected to wrap up its work Thursday, may need another meeting to complete its work after its staff writes a draft report, said panel chairman Bruce Marcus.

One issue it discussed Thursday was the state's moribund system of publicly financing gubernatorial election campaigns, which hasn't been used since 1994 as the cost of elections has escalated. The commission decided it would not recommend abolition of the system and would urge that counties and Baltimore city be given the authority to set up their own public financing systems. Beyond that, it could not reach consensus on proposals to redirect the money that remains in the account.

Other issues on which it previously reached agreement include more time for prosecuting election law violations by extending the statute of limitations from two years to three. The commission has also agreed to call on the Assembly to close a loophole that now allows certain business chiefs -- largely developers -- to avoid the state's maximum contribution limits by giving through multiple corporate entities. The loophole is especially useful for developers because they frequently set up multiple limited-liability corporations as owners of their various properties. In certain cases, developers and gambling interests have given hundreds of thousands of dollars over the state's standard limits, by using the so-called LLC loophole.

The panel agreed, however, that its recommendations will focus on all corporate entities rather than simply LLCs.

The panel includes lawmakers of both parties but has generally steered clear of partisan wrangling. It operates more on the basis of achieving broad consensus rather than taking votes on specific proposals.

The commission's recommendations largely track some made by "good government" advocates such as Common Cause over the years -- but with less specificity and less apparent enthusiasm for public financing. Once the panel makes its report, it will be up to the legislature whether to enact them.

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